Key figures
Oregon advisory
2026, with sources
- QSBS (IRC §1202)
- Disconnected from 2026SB 1507 adds excluded §1202 gain back to Oregon income for tax years 2026 and later.
- Job creation credit
- $1,000 per jobPer new Oregon job, up to 10 jobs per taxpayer, tax years 2026–2031; program cap $12.5M a year.
- R&D credit
- Semiconductors onlyOregon’s current research credit is limited to semiconductor companies (ORS 315.518).
SB 1507 and founders
The 2026 change with the biggest personal impact is QSBS. Federally, §1202 can exclude most or all of the gain on qualified small business stock held long enough; from 2026, Oregon adds that gain back. At Oregon’s top personal rate of 9.9% — before Portland-area taxes — a large exit can carry a meaningful Oregon bill even when the federal bill is zero.
DOR’s summary records that a referendum petition was filed against the parts of SB 1507 that disconnect from federal law, with signatures due June 4, 2026. Founders planning a 2026 or later sale should check DOR for the current status rather than assume either outcome.
Incentives
Oregon’s incentives are narrow. Its research credit is limited to semiconductor companies, and the new job creation credit is small but simple: $1,000 for each qualifying new job, certified by the Oregon Business Development Department, with a program-wide cap of $12.5 million a year.
- Job creation credit: $1,000 per new Oregon job, up to 10 per taxpayer, 2026–2031.
- Research credit: semiconductor companies only.
- PTE elective tax: extended through 2027, for S corporations and partnerships.
Where Oregon surprises
No sales tax is the headline; the rest of the system makes up for it. A company crossing $1 million of Oregon receipts owes the CAT on revenue regardless of profit, and its Portland employees can carry four local taxes — TriMet, Metro SHS, Preschool for All and the Portland Arts Tax — on top of state withholding. Modeling Oregon as low-tax because it has no sales tax tends to understate both payroll and tax cost.
The federal baseline
This page covers what Oregon adds. The federal rules underneath it apply here too.
Common questions
Does Oregon honor the federal QSBS exclusion?
Not from 2026. SB 1507 disconnects Oregon from the federal §1202 exclusion, so a founder who is an Oregon resident when they sell qualified small business stock in 2026 or later pays Oregon tax on the gain excluded federally. DOR noted a referendum petition against parts of SB 1507; check DOR’s legislation summary for its status before planning around it.
Is there an Oregon R&D credit we can use?
Not for a software company. Oregon’s research credit is limited to semiconductor companies. The broad 2026 incentive is the new job creation credit: $1,000 for each new Oregon job, up to 10 per taxpayer, for tax years 2026 through 2031, certified by Business Oregon.
Where do startups get caught in Oregon?
Usually Portland. A first hire in Portland brings TriMet and statewide transit taxes, Metro and Multnomah County personal income tax withholding at higher salaries, and Portland’s business taxes once receipts pass the exemption.
Advisory next door
- CACalifornia advisoryCalifornia has a 15% research credit that never expires but is not refundable, does not follow federal QSBS, and caps business credits at $5 million a year through 2029.
- IDIdaho advisoryIdaho follows federal law closely, including QSBS; its 5% research credit is nonrefundable and, since 2026, can’t be claimed on costs also deducted under §174A.
- NVNevada advisoryNo income tax means no R&D credit and no QSBS question. Incentives are GOED abatements, and the real risks are in wage rules and Secretary of State filings.
- WAWashington advisoryWashington has no corporate income tax and no general R&D credit; the planning issues are B&O on revenue, the capital gains tax on founders’ exits, and a 9.9% tax on income over $1 million from 2028.
Founder guides on this
- EquityStock options, 409A valuations and vesting for startupsHow option strike prices are set by a 409A valuation, how vesting and the cliff work, and why ASC 718 makes every grant an expense on your P&L.
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
More of the Oregon guide
- AccountingAccounting and state tax in OregonCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in OregonSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in OregonPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in OregonWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in OregonRegistering to do business, annual reports, franchise tax and the filing calendar
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.